High VAT is a deterrent to growth - BHA

The high level of VAT in the UK is a deterrent to the growth of the tourism sector. That's the warning from the British Hospitality Association (BHA), as it published its annual report for the year to 31 December 2010.

The BHA said: "The present level of VAT in the UK is one of the most pressing issues facing the industry today, making UK tourism uncompetitive with most European competitor countries, many of which impose a lower level on accommodation [France, for example, is 5.5%]. The Government's tourism strategy does not appear to acknowledge this."

The report found that the VAT rate of 20% in the UK is counterproductive to Prime Minister David Cameron's objective of growing UK tourism from 36% to 50% of total tourism spend by UK residents.

The news comes ahead of research commissioned by the association which is expected to detail the potential impact of a reduced rate of VAT on the restaurant sector.

Meanwhile, the BHA is gearing up to administer a hospitality industry task force, chaired by former Whitbread chief executive Alan Parker, which will prioritise rules and regulations which are holding the industry back. The Department for Culture Media and Sport (DCMS) has promised to work with the task force to cut, modify or abolish as much red tape as possible.

* The full report is on the BHA's website at www.bha.org.uk

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By Neil Gerrard

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